Canadian Prime Minister Announces Mandatory Climate-Related Financial Disclosures Plan

On December 16, 2021, Canadian Prime Minister Justin Trudeau announced that Canada was establishing a plan to compel Canadian companies to comply with mandatory climate-related financial disclosures. In pursuit of this new plan, Prime Minister Trudeau instructed Deputy Prime Minister and Minister of Finance Chrystia Freeland and Minister of Environment and Climate Change Steven Guilbeaut to begin the development of "mandatory climate-related financial disclosures based on the Task Force on Climate-related Financial Disclosures framework." Prime Minister's announcement is evidence that Canada is moving “to take bold, concrete action to build a healthier, more resilient future.”

In several previous client alerts Kennedy Sutherland has reported on the recent legislative interest in the enactment of new financial policies and procedures relating to climate-risk based financial engagements. With this effort, Canada has officially taken action to develop and implement legislative action in pursuit of addressing climate-related financial risk. Financial institutions in the United States should stay aprised on these Canadian efforts to ensure that they are aware of the recommended or mandatory practices that are being placed on institutions such as theirs. Although these Canadian efforts do not directly impact United States financial institutions, there is great probability that the legislative efforts that they enact will by similar to those eventually instituted in the United States as this action stems from a world-wide effort to enact these changes.